It is important to distinguish between temporary and permanent book-tax differences for which of the following reasons?
A) Temporary book-tax differences will reverse in future years whereas permanent differences will not.
B) Certain corporations are required to disclose book-tax differences as permanent or temporary on their tax returns.
C) Temporary book-tax differences will reverse in future years whereas permanent differences will not, and certain corporations are required to disclose book-tax differences as permanent or temporary on their tax returns.
D) Neither temporary nor permanent book-tax differences will reverse in future years nor are certain corporations required to disclose book-tax differences as permanent or temporary on their tax returns.

Question

Quizplus · Accepted Answer

It is important to distinguish between temporary and permanent book-tax differences because temporary differences will reverse in future years, whereas permanent differences will not. Additionally, certain corporations are required to disclose book-tax differences as permanent or temporary on their tax returns. This information is important for accurate tax reporting and financial statement preparation.

It Is Important to Distinguish Between Temporary and Permanent Book-Tax